Supply-chain sources cited by the variably-reliable Digitimes claim that Apple’s Q2 chip orders are down on previous years, and that demand for the iPhone SE is not high enough to offset declining demand for the iPhone 6s/Plus.
Shipments for the new iPhone SE will be unable to offset the fall in shipments for the iPhone 6s and 6s Plus devices in the second quarter, the sources continued. The shipment target for the SE in the second quarter is four to five million units, the sources said.
Apple did caution that the current quarter’s revenue would see its first year-on-year fall in 13 years, the company predicting a drop of around 11%, which will be in large part due to (probably temporary) ‘peak iPhone.’ This latest report suggests that the slump may continue into the following quarter …
It’s worth noting that Apple has cautioned on several occasions that supply chain sources are an extremely unreliable way to predict demand for its products due to its diverse component suppliers.
We’ll find out how well Apple did this quarter on 25th April, but we’ll have a while to wait before discovering whether this latest rumor has any basis in fact. It was reported a few days ago that third-party retailers in China have received 3.4M preorders for the iPhone SE, with less interest elsewhere. The new model does, though, seem to be helping Apple attract converts from Android.
Photo: Engadget
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No way, people don’t want last year’s phone in the body of the phone from 3 years ago??
I do, but I still want to see what apple will be offering with the iPhone7 before i go out and buy an SE. I have an iPhone 5 and really like the form factor.
Truly the epitome of first-world “problems”…..
The horror, the horror… Apple is going down in flames again, said NO ONE EVER.
Lol actually that’s not true if you go back in time to the 1990s. I would have had one of these in hand today if they would have let me pre-order for in store pick up. Even the rep in chat was somewhat amused there was no option to do it.
Oh for crying out loud, it’s been on the market, what…a week now. Nowhere near enough time to make any kind of a judgement call on this. Oh, right, it’s Digitimes making up s*** again.
It’s only on sale in stores today!
Such articles are like food for android fans. They need such stories to vent their frustrations.
Apple plans to make 30 million SE compared to the 80-90 million they. Usually make in the fall.
So Apple shipped 76 M phones in Oct-Dec and the suppliers are unhappy that Apple has not ordered 76 M phones for the Jan-Mar quarter? There is always a fall in demand in the Jan-Mar quarter vs the previous one. Suppliers will have benefitted only from the orders Apple sent for launch stock of the SE. Apple will be waiting to see how the launch goes before adjusting orders with suppliers. It’s unreasonable to think they can benefit much in Jan-Mar quarter, but soon they are getting ready to report their Jan-Mar financials and they need to make sure investors don’t have unreasonable expectations. This is no indication of how the public has reacted to the SE it only at best indicates that Apple have been modest in their orders for launch day stock.
I have a question. What will be iPhone SE’s upgrade cycle? Will it be every year? Every 2 years? And when will it be upgraded? Will they upgrade the SE in September or March? I would love for the iPhone cycle to start in June/July again… Missing those days.
My guess is 18 months for this one, to bring it into line with the main cycle.
That would be obvious but the reason I think Apple wouldn’t do this is to sell more of their flagship iPhones. If Apple announces iPhone 7S and iPhone SE 2, I think too many people will get the SE, assuming it will have the same specs as iPhone 7S. If Apple announces the SE a couple of months later, maybe some people will not want to wait and get the 7S instead. But anyway we’ll see. I’m always getting the 4.7inch model anyway.
I’m sure it will hold back on the specs as it has this time.
There are major benefits to spreading releases over the year.
This phone is either a one off or I would suspect a two year upgrade cycle that continues to share the some of the same parts as the September release. This better utilizes production capacity and spreads revenue more evenly over the year.
You don’t think it will be a one off like the 5c? Next year will most likely see the 5.8″ OLED model followed by 4.3″ and 5″ OLED in 2018. I would expect Apple to go with the smaller footprint and move the screen from 4″ to 4.3″, but could keep it at 3″ if they are not enough OLED screens in 2018.
I really think the SE will be a one off.
No, the 5c was only a one-off because it wasn’t that popular. So long as the SE expands Apple’s market, it will be around for some time, I think.
Nobody really knows that answer yet but Apple. They are probably going to wait to see how things go with the sales of the SE before they make any major decisions.
iPhone SE in European countries like Belgium still costs 490€ for the 16GB model. So that is 100 more than the number we saw in the keynote. That is another trick by Apple to make it seem as if iPhone SE is the budget phone, which it is but it is still nearly 500€… Apple earns so much money from currency fluctuations… 1€ is already worth more than 1$, and still they need to make their products in Europe more expensive.
The US ($) price quoted in the Keynote is with no taxes. $399+20% Tax is what exactly? With today’s exchange rate this is 438€.
Not the 100 you quoted.
However, I do understand your frustration. We stll see £1 == $1 used with some US Companies. This is why I tend to buy my Apple kit when in the US on Business/Vacation and in states with no sales tax.
Why does Apple announce their prices without including taxes? I mean the majority of consumers need to pay tax when buying an iPhone si it’s ridiculous.
But even if you include taxes, it’s still much more expensive than in Europe… Here in Belgium the 6S Plus 128GB costs 1079€ or 1230$ while the same device costs 1138$ in the US, after tax. 100$ difference which is just theft.
And if you take the maxed out 15inch retina Macbook Pro, it costs 3599€ or 4101$ while the same device costs 3839$ in the US, after tax. 300$ difference. Just don’t get it.
Why does Apple announce/advertise prices without including sales tax?
Because there are, literally, 50 different tax rules in the US alone. Even if the rates are the same in some states, the rules could be different
Examples (Ones I have personally experienced):
NH – no sales tax at all
SC – Sales tax on the price paid (meaning if I pay full retail, 7% on that amount. If I get a subsidy, 7% on that amount)
MA – 5% on full retail (regardless what I pay for it)
So there is no sane way for Apple to present this in a slide in a keynote.
Apple got kicked in the teeth last year when exchange rates shifted and lost out on a lot of revenue. They have to protect themselves from this happening again.
Also many countries outside of the US have quite high sales tax or value added tax, which might be as high as 20%.
Some countries require that advertised prices include tax others add it on only when you pay. Buyers in the US have to pay sales tax on top of the price Apple sets and this rate changes from city to city.
Apple does not show VAT, because it varies based on zip code, city and state. Within 5 miles of me there is 4 different sales tax rates. Expand it out to 20 miles from the tax rate can vary from 4% to 8.95%. Each city, state and county set their own tax rate to pay for tax funds for school bonds, building bonds and other funding for thinks like fire and police. Every year several locations in each state have votes to raise the sales tax rates to fund bond issues.
Lets see how the SE goes – physically in shops only today – sales are the issue, not guess work by these pundits.
Apple is making a level of sales/profits any other corporation could only dream of. Greedy money men who want endless increases may have to manage their expectations – growth can’t go on for ever.
Yes, Apple is making great sales. But it needs great sales to support its $600 billion market cap. And if it can’t support its market cap, then the stock options it compensates its engineers in become much less valuable. But it certainly doesn’t need endless growth. In fact the stock is priced at a level that suggests negative growth. The question is how negative the growth will be until iPhone 7 is released.
Personally, I think iPhone 7 gets released at a price point $100 cheaper than iPhone 6s. At that release, the SE drops in price by $50. And we have three phones available for sale, the SE, the 6s and the 7 (with Plus versions for 6s and 7 available). The 7 will also be released with 32gb as base storage and that will be ample for people who would otherwise have paid the extra $100 for the 64gb.
It comes back to the incredible difficulty of supporting a $600 billion valuation. You either need huge current revenue or a story for why your revenue is going to grow significantly. Apple has definitely not sold the Market on why there will be huge growth.
And the SE is definitely going to sell vastly more than 4 to 5 million units per quarter.
Hi Jon
Interesting financial analysis, I’m not a money man to second guess you.
I agree with you on the SE sales – I see plenty of room in two markets (a) lower price point (b) people who just don’t want or need a large size.
If you thought that the iPhone SE’s purpose was to reverse the declining iPhone 6S sales than I think you fundamentally misunderstood the point of the iPhone SE. The iPhone SE is a product for the developing market, and for anyone who simply wanted a smaller iPhone. It is not meant to replace the iPhone 6S, nor would it mitigate the declining sales of an end of life (or more appropriately stated, end of flagship era) device. The people who would otherwise be buying an iPhone 6S are now waiting until the fall to purchase an iPhone 7.
There was pent-up demand for a larger screen making the 6 a great seller, but the 6 series is not an Apple-worthy product. The design is so old fashioned compared to modern larger smartphones. The design is not a sleek, clean lust-worthy Apple design. The best I have heard is that you can put a case on it, but it’s still preposterously humungous for its screen size. I have stayed away from it and picking up a SE instead.
Well I’ll be getting mine as soon as I get the chance, no rush. My only complaint is no 128G
They aren’t TRYING to replace the 6S, it’s just replacing the 5S, which is two years old. The other aspect is they haven’t rolled out the product to everywhere.. I would wait till June to see what the total sales of IPhones were during the first full quarter and then compare to the same quarter last year.
I think Apple would of sold a lot more iPhone SE’s if they would of put all the same features in it as the 6S. I think leaving out some of the features stop a lot of people from buying it. A lot of people wanted the 6S in a 4″ form factor not a hybrid of the 5S and 6S. But I still think the SE will sell well. I know ai bought one because I don’t want a bigger phone. But I wish it still would of been the same as the 6S just in a smaller form factor. Maybe if they get rid of the big bezel at the top they could make the 4.7″ alittle smaller but same screen size.
It’d help if they had phones in stock. Went to my carrier store to get a 6S and SE. I was told they had no 6S phones in stock above 16GB and was directed to Best Buy. Get to Best Buy and they don’t have the SE model color and size I wanted in stock. Maybe it’s just coincidence, but you’d think they’d have these phones in stock. Especially the SE since today is the first day it’s available.
No doubts, Apple already knew this will happen. The older iPhone look is good but will not pull the same results that iPhone 5s pulled once.